Excellent total metallurgical recovery of 93.3% confirmed by initial metallurgical testwork on the Gilbeys South prospect

High gravity gold recovery of 36.5%

Very low cyanide consumption of only 0.34kg/t (less than at the Gilbeys deposit) expected to result in low processing costs for Gilbeys South

This testwork confirms that the Gilbeys South discovery can be recovered through the proposed Dalgaranga process plant

Gascoyne Resources Limited ("Gascoyne" or "Company") is pleased to advise that it has completed initial metallurgical testwork at the Gilbeys South prospect at the 100% owned Dalgaranga Gold Project. The Dalgaranga Gold Project already contains a Measured, Indicated and Inferred Resource of 25.7Mt @ 1.4 g/t gold for 1.12 million ounces of contained gold including Proved and Probable Ore Reserve of 552,000 ounces of gold (see Figures 1 & 2 & Tables 4 & 5 below). The Company expects to report an update to Resources and Reserves later this quarter once further assay results are received from recent drilling.The initial metallurgical testwork results reported herein confirms that the Gilbeys South prospect can be recovered through the proposed Dalgaranga process plant.

Gilbeys South Metallurgical Testwork Summary

Four composite samples have been tested to confirm the metallurgical characteristics of the Gilbeys South prospect. Samples were collected from different geological domains (oxide, transition and fresh) as well as testing the total strike length of the prospect (see Figure 4). The samples were composited from the RC drilling that has been completed at the prospect and the results confirm excellent total recovery not only in the oxide but also from the transitional and fresh mineralisation.

The tests have demonstrated very rapid leaching kenetics for each of the samples, and overall recovery of between 90.1% and 95.1% (average of 93.3%) after 24 hours, and very high gravity gold recovery of between 24% and 45% (average of 36.5%). These recoveries and leaching kenetics are comparable to the Gilbeys Deposit (see Tables 1 - 3 and Figure 3 below).

Another favourable outcome of the testwork is confirmation of very low reagent consumption required to achive the high recoveries outlined above. The cyanide consumption from the tests ranged from 0.26kg/t to 0.39kg/t (average consumption of 0.34kg/t). This consumption rate is slightly lower than historically used in the original process plant and adopted in the recently completed Feasibility Study, which assumed 0.4kg/t would be required. Cyanide is one of the highest reagent costs in the process plant, so confirmation of low cyanide consumption from the Gilbeys South prospect is expected to have a postive impact on processing costs for the Gilbeys South prospect.

Significant Newsflow over the Coming Months

As announced to the ASX on the 25th November, 2016 the Gascoyne Board has approved the Dalgaranga Feasibility Study and subject to obtaining a suitable financing arrangement, has approved the project to proceed to construction.

Whilst financing is progressed over the coming months, the Company expects to deliver significant and regular news flow as it continues to make strong progress on early development activities at Dalgaranga and continues to progress an extensive exploration programme, with key news flow to be reported including:

Gascoyne Resources Ltd. published this content on 23 January 2017 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 23 January 2017 01:30:02 UTC.